Month: September 2017

The mind-set and tactics you employ to buy your first Edgware buy to let property needs to be different to the tactics and methodology of buying a home for yourself to live in. The main difference is when purchasing your own property, you may well pay a little more to get the home you (and your family) want, and are less likely to compromise. When buying for your own use, it is only human nature you will want the best, so that quite often it is at the top end of your budget (because as my parents always used to tell me – you get what you pay for in this world!).

Yet with a buy to let property, if your goal is a higher rental return – a higher price doesn’t always equate to higher monthly returns – in fact quite the opposite. Inexpensive Edgware properties can bring in bigger monthly returns. Most landlords use the phrase ‘yield’ instead of monthly return. To calculate the yield on a buy to let property one basically takes the monthly rent, multiplies it by 12 to get the annual rent and then divides it by the value of the property.

This means, if one increases the value of the property using this calculation, the subsequent yield drops. Or to put it another way, if a Edgware buy to let landlord has the decision of two properties that create the same amount of monthly rent, the landlord can increase their rental yield by selecting the lower priced property.

To give you an idea of the sort of returns in Edgware…

Edgware Property type

Average Price paid (last 12 months) in Edgware

Average Rent Achieved in last 12 months in Edgware

Lower End of Yield Range in Edgware

Average Yield in Edgware

Upper End of Yield range in Edgware

Detached

£805,518

£3,022

3.12%

4.50%

5.34%

Semi-Detached

£575,815

£1,748

2.78%

3.64%

5.46%

Terraced

£436,069

£1,648

3.30%

4.54%

7.45%

Flats

£321,188

£1,248

3.28%

4.66%

5.61%

Now of course these are averages and there will always be properties outside the lower and upper ranges in yields: they are a fair representation of the gross yields you can expect in the Edgware area.

As we move forward, with the total amount of buy to let mortgages amounting to £199,310,614,000 in the country, landlords need to be aware of the investment performance of their property, especially in the era of tax increases and tax relief reductions. Landlords are looking to maximise their yield – and are doing so by buying cheaper properties.

However, before everyone in Edgware starts selling their upmarket properties and buying cheap ones, yield isn’t the only factor when deciding on what Edgware buy to let property to buy. Void periods (i.e. the time when there isn’t a tenant in the property between tenancies) are an important factor and those properties at the cheaper end of the rental spectrum can suffer higher void periods too. Apartments can also have service charges and ground rents that aren’t accounted for in these gross yields. Landlords can also make money if the value of the property goes up and for those Edgware landlords who are looking for capital growth, an altered investment strategy may be required.

In Edgware, for example, over the last 20 years, this is how the average price paid for the four different types of Edgware property have changed…

Edgware Detached Properties have increased in value by 331.6%

Edgware Semi-Detached Properties have increased in value by 331.1%

Edgware Terraced Properties have increased in value by 309.2%

Edgware Apartments have increased in value by 342.6%

It is very much a balancing act of yield, capital growth and void periods when buying in Edgware. Every landlord’s investment strategy is unique to them. If you would like a fresh pair of eyes to look at your portfolio, be you a private landlord that doesn’t use a letting agent or a landlord that uses one of my competitors – then feel free to drop in and let’s have a chat. What have you got to lose? 30 minutes and my tea making skills are legendary!

If you are a landlord or thinking of becoming one for the first time, and you want to read more articles like this about the Edgware Property Market together with regular postings on what I consider the best buy to let deals in Edgware, out of the many of properties on the market, irrespective of which agent is selling it, then feel free to get in touch! Email me at Steve@benjaminstevens.co.uk

If you are in the area feel free to pop into the office we are based at 194 Station Road Edgware Middlesex HA8 7AT– the kettle is always on.

Don’t forget to visit the links below to view back dated deals and Edgware Property News.

Max Lee, 37-year-old father of two from Edgware, was out house hunting. It was a pleasant August Saturday afternoon, and our man cycles along on his bike. He cycles up a street of suburban semis, where he spots a few retired mature neighbours, chatting to each other over the garden fence. He leans his bicycle against a lamppost and launches softly into his property search.

“Anyone on the road contemplating moving?” Max asks, “I am not a landlord or developer, I’m just an Edgware bloke trying to get out of renting, buy a house, do it up and live in it with my wife and two children”

“The only way I will leave here is in a box”, answers an 80-something lady, wearing her fading Paisley patterned housecoat from the 1970’s.

“I‘ve lived here since before you were born, its lovely up here .. we aren’t moving, are we Doris?” (as her neighbour sagely shook his head at his wife).

Max, like many Edgware people born in the late 1970’s to the early 1990’s, is keen to get a slice of prime Edgware real estate. Yet people like Max in Generation Y (or the Millennials as some people call them i.e. born between 1977 and 1994 and needing family housing now) are discovering, as each year passes by, they are becoming more neglected and ignored when it comes to moving up the property ladder.

Looking at the graph for the UK as whole …

“Percentage of each age group that are home owners 1981 to today ”

Over 75 percent of Brits aged 65 and above (the baby boomers) are owner-occupiers, the biggest share since records began and a proportional rise of over 48.3% since the early 1980’s. Looking at those Baby Boomers (the current 65+year olds) .. and roll the clock back 36 years (to when they were in their 30’s and 40’s and two thirds (65.6%) of them owned their own home.

Whilst today, just under a half of 25 to 49 year olds (47.3%) own their own home.

However, the biggest drop has been in the 18 to 24-year old’s, where homeownership has dropped from a third (32%) in the 1980’s to less than one in ten (8.9%) today. Looking at the Edgware statistics, the numbers make even more interesting reading.

‘Total Number of Households Occupied in The Age Range’ in Edgware

…and of that ‘Total Number of Households Occupied in The Age Range’– the number of those Owned in Edgware

… giving the Percentage of Households in That Age Range That Are Owned in Edgware

Head of Household 18 to 24 years old

510

65

12.75%

Head of Household 25 to 49 years old

10941

4962

45.35%

Head of Household 50 to 64 years old

6199

4484

72.33%

Head of Household 65+ years old

5297

3924

74.08%

Government policy contributes to the generational stalemate. Stamp Duty rules prevent older Brits from moving as the price of land and planning rules make it harder to build affordable bungalows that are attractive to members of the older generation who want to move.

The average value of an acre of prime building land in the UK is between £750,000 and £800,000 per acre. Bungalows are the favoured option for the older generation, but the problem is bungalows take up too much land to make them profitable for new homes builders. The housing market is gridlocked with youngsters wanting to get on (then move up) the property ladder whilst the older generation, who want to move from their larger houses to smaller, more modern bungalows, can’t. The problem is – there simply aren’t enough bungalows being built and the high price of land, means they are prohibitive to build.

So, what is my point? Well, all I would say to the homeowners of Edgware is that one solution could be to start to talk to your local councillors, so they can mould the planners’ thoughts and the local authority thinking in setting land aside for bungalows instead of two up two down starter homes? That would free the impasse at the top of the property ladder (i.e. mature people living in big houses but unable to move anywhere), releasing the middle aged gridlocked people in the ladder to move up, thus releasing more existing starter homes for the younger generation.

… and to you Max … the wandering new home searcher – if things are going to change, it will be years before they do .. so keep going out and spreading the word of your search for a new home for your family.

If you are a landlord or thinking of becoming one for the first time, and you want to read more articles like this about the Edgware Property Market together with regular postings on what I consider the best buy to let deals in Edgware, out of the many of properties on the market, irrespective of which agent is selling it, then feel free to get in touch! Email me at Steve@benjaminstevens.co.uk

If you are in the area feel free to pop into the office we are based at 194 Station Road Edgware Middlesex HA8 7AT– the kettle is always on.

Don’t forget to visit the links below to view back dated deals and Edgware Property News.

The tightrope of being a Edgware buy-to-let landlord is a balancing act many do well at. Talking to several Edgware landlords, they are very conscious of their tenants’ capacity and ability to pay the rent and their own need to raise rents on their rental properties (as Government figure shows ‘real pay’ has dropped 1% in the last six months). Evidence does suggest many landlords feel more assured than they were in the spring about pursuing higher rents on their properties.

During the summer months, historic evidence suggests that the rents new tenants have had to pay on move in have increased. June/July/August is a time when renters like to move, demand surges and the normal supply and demand seesaw mean tenants are normally prepared to pay more to secure the property they want to live in, in the place they want to be. This is particularly good news for Edgware landlords as average Edgware rents have been on a downward trend recently. So look at the figures here…

Rents in Edgware on average for new tenants moving in have risen 2.6% for the month, taking overall annual Edgware rents 0.6% lower for the year

However, several Edgware landlords have expressed their apprehensions about a slowing of the housing market in Edgware. I think this negativity may be exaggerated.

Before we get the Champagne out, the other side of the coin to property investing is capital values (which will also be of interest to all the homeowners in Edgware as well as the Edgware buy-to-let landlords). I believe the Edgware property market has been trying to find some level of equilibrium with property prices easing back slightly since the New Year. According to the Land Registry…

Property Values in Edgware are 0.15% lower than they were 12 months ago, dropping by 1.1% last month alone!

Yet, I would take those figures with a pinch of salt as they reflect the sales of Edgware properties that took place in early Spring 2017 and now are only exchanging and completing during the summer months.

The reality is the number of properties that are on the market in Edgware today has risen by 27.47% since the New Year and that will have a dampening effect on property values. As tenants have had less choice, buyers now have more choice … and that will temper Edgware property prices as we head towards 2018.

Be you a homeowner or landlord, if you are planning to sell your Edgware property in the short term, it is crucial, especially with the rise in the number of properties on the market, that you realistically price your property when you bring it to the market … with the increase in choice of properties, the balance of power during negotiation generally sways towards the buyer. Given that everyone now has access to property details, including historic stats for how much property have sold for, they will be more astute during the offer and negotiation stages of a purchase.

However, even with this uplift in the number of properties for sale in Edgware, property prices will remain stable and strong in the medium to long term. This is because the number of properties on the market today is still way below the peak of summer of 2008, when there were 826 properties for sale compared to the current level of 413 (if you recall, prices dropped by nearly 20% in Credit Crunch years of ‘08 and ‘09).

Compared to 2008, today’s lower supply of Edgware properties for sale will keep prices relatively high…and they will continue to stay at these levels for the medium to long term.

Less people are moving than a few years ago, meaning less property is for sale. Fewer properties for sale mean property prices remain relatively high and this is because of a number of underlying reasons. Firstly, buy-to-let landlords tend not sell their properties as often than owner-occupiers, consequently removing the property out of the housing market selling cycle. Secondly, Stamp Duty is much higher compared to 10 years ago (meaning it costs more to move). Next, there is a dearth of local authority rental housing so demand for private rented housing will remain high. Then we have the UK’s maturing owner occupier population, meaning these older people are less likely to move (compared to when they were younger). Another reason is the lack of new homes being built in the country (we need 240k houses a year to be built in the UK and we are currently only building 145k a year!) and finally, the new mortgage rules introduced in 2014 about how much a person can borrow on a mortgage has curtailed demand.

Some final thought’s before I go – to all the Edgware homeowners that aren’t planning to sell – this talk of price changes is only on paper profit or loss. To those that are moving … most people that sell, are buyers as well, so as you might not get as much for yours, the one you will want to buy won’t be as much, (swings and roundabouts as Mum used to say!)

To all the Edgware landlords – keep your eyes peeled – I have a feeling there may be some decent buy-to-let deals to be had in the coming months. One place for such deals, irrespective of which agent is selling it, is my Edgware Property Blog

The most recent set of data from the Land Registry has stated that property values in Edgware and the surrounding area were 2.53% higher than 12 months ago and 18.6% higher than January 2015.

Despite the uncertainty over Brexit as Edgware (and most of the UK’s) property values continue their medium and long-term upward trajectory. As economics is about supply and demand, the story behind the Edgware property market can also be seen from those two sides of the story.

Looking at the supply issues of the Edgware property market, putting aside the short-term dearth of property on the market, one of the main reasons of this sustained house price growth has been down to of the lack of building new homes.

The draconian planning laws, that over the last 70 years (starting with The Town and Country Planning Act 1947) has meant the amount of land built on in the UK today, only stands at 1.8% (no, that’s not a typo – its one point eight percent) and that is made up of 1.1% with residential property and 0.7% for commercial property. Now I am not advocating building modern ugly carbuncles and high-rise flats in the Cotswolds, nor blot the landscape with the building of massive out of place ugly housing estates around the beautiful areas such as Edgware Park.

The facts are, with the restrictions on building homes for people to live in, because of these 70-year-old restrictive planning regulations, homes that the youngsters of Edgware badly need, aren’t being built. Adding fuel to that fire, there has been a large dose of nimby-ism and landowners deliberately sitting on land, which has kept land values high and from that keeps house prices high.

Looking at the demand side of the equation, one might have thought property values would drop because of Brexit and buyers uncertainty. However, certain commenters now believe property values might rise because of Brexit. Many people are risk adverse, especially with their hard-earned savings. The stock market is at an all-time high (ready to pop again?) and many people don’t trust the money markets. The thing about property is its tangible, bricks and mortar, you can touch it and you can easily understand it.

The Brits have historically put their faith in bricks and mortar, which they expect to rise in value, in numerical terms, at least. Nationally, the value of property has risen by 635.4% since 1984 whilst the stock market has risen by a very similar 593.1%. However, the stock market has had a roller coaster of a ride to get to those figures. For example, in the dot com bubble of the early 2000’s, the FTSE100 dropped 126.3% in two years and it dropped again by 44.6% in 9 months in 2007… the worst drop Edgware saw in property values was just 17.13% in the 2008/9 credit crunch.

Despite the slowdown in the rate of annual property value growth in Edgware to the current 2.53%, from the heady days of 16.98% annual increases seen in mid 2014, it can be argued the headline rate of Edgware property price inflation is holding up well, especially with the squeeze on real incomes, new taxation rules for landlords and the slight ambiguity around Brexit. With mortgage rates at an all-time low and tumbling unemployment, all these factors are largely continuing to help support property values in Edgware (and the UK).

For more thoughts on the Edgware Property Market, please visit the Edgware Property Market Blog

If you are a landlord or thinking of becoming one for the first time, and you want to read more articles like this about the Edgware Property Market together with regular postings on what I consider the best buy to let deals in Edgware, out of the many of properties on the market, irrespective of which agent is selling it, then feel free to get in touch! Email me at Steve@benjaminstevens.co.uk

If you are in the area feel free to pop into the office we are based at 194 Station Road Edgware Middlesex HA8 7AT– the kettle is always on.

Don’t forget to visit the links below to view back dated deals and Edgware Property News.

“What’s happening to the Edgware Property Market” is a question I am asked repeatedly. Well, would it be a surprise to hear that my own research suggests that there isn’t just one big Edgware property market – but many small micro-property markets?

According to recent data released by the Office of National Statistics (ONS), I have discovered that at least three of these micro-property markets have emerged over the last 20+ years in the area.

For ease, I have named them the …

‘lower’ Edgware Property Market.

‘lower to middle’ Edgware Property Market.

‘middle’ Edgware Property Market.

The ‘lower’ and ‘lower to middle’ sectors of the Edgware property market have been fuelled over the last few years by two sets of buyers. The first set, making up the clear majority of those buyers, are cash rich landlord investors who are throwing themselves into the Edgware property market to take advantage of alluringly low prices and even lower interest rates. The other set of buyers in the ‘lower’ and ‘lower to middle’ Edgware property market are the first-time buyers (FTB), although the FTB market is in a state of unparalleled deadlock as it’s been trampled into near-immobility and incapacity by the new 2014 stricter mortgage affordability regulations and also fewer mortgages with low deposits.

Some of you may be interested to know how I have classified the three sectors ..

‘middle’ Edgware housing market – which is the median in terms of value

…. and if one looks at the figures for Barnet London Borough Council area you can see the three different sectors (lower, lower/middle and middle) have performed quite differently.

Barnet London Borough CouncilProperty Market – Sold Prices

Price Paid in 1995

Price Paid in 2017

Percentage Uplift

1995 – 2017

Lower (Bottom 10%)

£45,000

£280,000

522.22%

Lower to Middle (Lower Quartile)

£59,950

£360,000

500.50%

Middle (The Median)

£111,740

£604,946

441.39%

You can quite clearly see that it is the ‘middle’ market that has performed the best.

You might ask, what do all these different figures mean to homeowners and landlords alike? Quite a lot – so let me explain. The worst performing sector (with the lowest Percentage uplift) was the ‘lower’ housing market. Therefore, interestingly, if we applied the best percentage uplift figure (i.e. from the ‘middle’ market percentage uplift), to the ‘lower’ 1995 housing market figure, the 2017 figure of £604,946, would have been £695,269 instead – quite a difference you must agree?

Now, I have specifically not mentioned the upper reaches of the Edgware housing market for several reasons. Firstly, the lower or middle market is where most of the buy to let investment landlords buy their property and where the majority of property transactions take place. Secondly, due to the unique and distinctive nature of Edgware’s up-market property scene (because every property is different and they don’t tend to sell as often as the lower to middle market), it is much more difficult to calculate what changes have occurred to property prices in that part of the Edgware property market – looking at the stats for the up-market Edgware property market from Land Registry, only 25 properties in Edgware (and a 1 mile radius around it) have sold for £3,000,000 or more since 1997.

So, what should every homeowner and buy to let landlord take from the information that there are many micro-property markets? Well, when you realise there isn’t just one Edgware Property Market, but many Edgware “micro-property markets”, you can spot trends and bag yourself some potential bargains. Even in this market, I have spotted a number of bargains over the last few months that I have shared in my Property Blog and to my landlord database, especially in the ‘lower’ and ‘lower/middle’ market. If you want to be kept informed of those buy to let bargains, have a look at my blog INSERT URL .. it’s free to do so and I’m sure you wouldn’t want to miss out – would you?

I would love to know if you have spotted any micro-property markets in Edgware.

If you are a landlord or thinking of becoming one for the first time, and you want to read more articles like this about the Edgware Property Market together with regular postings on what I consider the best buy to let deals in Edgware, out of the many of properties on the market, irrespective of which agent is selling it, then feel free to get in touch! Email me at Steve@benjaminstevens.co.uk

If you are in the area feel free to pop into the office we are based at 194 Station Road Edgware Middlesex HA8 7AT– the kettle is always on.

Don’t forget to visit the links below to view back dated deals and Edgware Property News.

About the blog

This blog follows the property market in Edgware and the surrounding area, giving insight, analysis and comment on all property related matters and the local property market.
If you are interested in buying, renting, investing in Edgware then this is the blog to follow to keep up to date with all the information you need.

The author

Steve Wayne is the Managing Director of Benjamin Stevens Estate Agents, working locally in property since he was 17
Since 2004 he has had his own firm with branches of Benjamin Stevens in Edgware & Bushey Heath.